Ethiopia continues to engage actively in addressing economic challenges amid a complex global environment marked by uncertainty, shifting trade dynamics, and the need for sustained reforms. According to the International Monetary Fund’s (IMF) 2025 Annual Report, Ethiopia, like many low-income countries, faces significant external pressures but remains focused on fostering macroeconomic stability and growth with IMF support.

The IMF report highlights the global economy’s tepid growth forecast of 2.8 percent for 2025 and 3.0 percent for 2026, pointing out challenges such as trade tensions, debt burdens, and the impacts of technological transformation including artificial intelligence. Low-income countries, Ethiopia among them, are implementing reforms to restore fiscal stability and enhance economic resilience despite harsh external shocks.

Ethiopia benefits from IMF capacity development efforts that strengthen crucial economic institutions including finance ministries, central banks, and revenue authorities. These efforts equip policymakers with tools to design effective policies aimed at improving public finance management, revenue mobilization, and financial sector stability.

The IMF has approved lending arrangements for Ethiopia under concessional frameworks, supporting the country’s endeavors for balance of payments stability and growth-friendly fiscal adjustments. Continued collaboration focuses on strengthening macroeconomic frameworks, expanding digital infrastructure, and improving regulatory environments to attract investment and boost productivity.

The report underscores the importance of Ethiopia’s structural reforms aimed at easing bureaucratic hurdles, increasing economic participation, and deepening capital markets. It calls for Ethiopia to maintain fiscal discipline while investing strategically in infrastructure and innovation to sustain growth momentum.

Ethiopian authorities are also encouraged to pursue international cooperation to secure a stable trade environment and facilitate debt restructuring to manage vulnerabilities amid uncertain global financial conditions.

As Ethiopia progresses on its economic reform path, IMF engagement remains strong through technical assistance, surveillance, and supportive lending facilities. These efforts are integral to Ethiopia’s quest to transform its economy, reduce poverty, and increase resilience to external shocks in a rapidly changing global landscape.

Despite global progress towards universal electricity access, hundreds of millions of Africans continue to live without reliable power, relying on kerosene lamps, candles, and firewood for basic needs. This energy poverty exacts a heavy toll, manifested in stunted economic growth, lost opportunities, and an estimated 700,000 preventable deaths each year due to household air pollution.

The oft-repeated statistic that some 600 million Africans lack electricity access has become a familiar but sobering refrain. While it risks becoming a figure that fades into the background, the real-world impacts remain starkly visible in communities across the continent. Household reliance on polluting fuels releases toxic fumes that endanger health, particularly for children. The World Health Organization attributes 3.2 million deaths annually worldwide to indoor air pollution, with over 237,000 children under five among the victims. In Africa, the number reaches approximately 700,000, including deaths from pneumonia, heart disease, respiratory illnesses, strokes, and lung cancer.

Nigeria shoulders the greatest burden with over 80 million of its population still without electricity— the highest number globally. The Democratic Republic of Congo and Ethiopia collectively add about 130 million more people facing power shortages. Together, these three countries represent nearly a third of the continent’s population living in the dark.

The absence of dependable electricity hampers prospects for industrialization, job creation, value-added manufacturing, and competitive exports that could transform African economies and improve living standards.

For Damilola Ogunbiyi, CEO and UN Special Representative for Sustainable Energy for All (SEforALL), the foundational challenge lies in policy frameworks and financing mechanisms. Ogunbiyi stresses that translating lofty commitments into tangible implementation is critical. SEforALL tracks progress annually on electrification initiatives, infrastructure like electric vehicle charging stations, and quantifiable impacts to livelihoods. Though many countries’ energy transitions will be gradual, Ogunbiyi encourages Africa to capitalize on the opportunity to forge a green energy future from the ground up.

Yet, this opportunity risks slipping away. Claver Gatete, Executive Secretary of the UN Economic Commission for Africa (ECA), laments that despite Africa’s vast solar potential accounting for 60 percent of the world’s total, the continent receives less than three percent of global energy investment. He warns that financing gaps risk locking Africa into short-term energy fixes rather than resilient long-term solutions.

To address these challenges, Robert Lisinge, Director for Technology, Innovation, Connectivity and Infrastructure at ECA, highlights collaborative efforts with the African Union and regional bodies like the Southern African Development Community (SADC) to develop harmonized energy frameworks. These policies aim to align continental priorities with international goals such as the Sustainable Development Goals (SDGs) and Africa’s Agenda 2063, ensuring the continent’s energy needs remain central in global discussions.

Despite daunting obstacles, progress is evident in several African countries. Kenya stands out for producing more than 80 percent of its electricity from renewable sources, serving as a replicable model. Morocco’s Noor Ouarzazate solar complex is among the world’s largest solar power facilities, demonstrating large-scale renewable energy deployment on the continent.

Discussions around integrating nuclear energy into Africa’s energy mix are ongoing. More than 20 countries are considering small modular reactors and microreactors to boost rural electrification, though concerns about costs, safety, and waste persist. Proponents argue that countries like France and Canada have successfully harnessed nuclear power as part of their low-carbon energy portfolios and that, with appropriate regulation, nuclear could complement renewables in providing stable baseload power essential for growth.

Private sector engagement is also pivotal. Osayande Igiehon, CEO of Heirs Energies, emphasizes the firm’s dual strategy of improving the efficiency and cleanness of existing oil and gas assets while expanding renewable energy projects. This approach aims not only to reduce emissions but also to facilitate socio-economic development by bringing infrastructure such as schools, clinics, and roads to underserved communities. He recognizes hydrocarbons continue to meet present energy demands but stresses renewables must drive Africa’s future growth.

Young innovators across the continent—from Kenya, Rwanda’s capital Kigali, Ghana, to Nigeria—are driving grassroots advances. Solar start-ups and community-led clean energy initiatives are gaining traction, generating localized solutions to close energy gaps and foster sustainable development.

Closing Africa’s electricity access gap will shape the pace of the continent’s industrialization, the success of the African Continental Free Trade Area (AfCFTA), and realization of the ambitious vision laid out in Agenda 2063. Most critically, it will determine whether millions continue to suffer and die unnecessarily from energy poverty or whether Africa’s immense renewable resources are harnessed to power a more equitable and sustainable future.

Leading figures such as Damilola Ogunbiyi, Robert Lisinge, and Osayande Igiehon recently discussed these issues in the Economic Commission for Africa’s Sustainable Africa Series, highlighting the urgency of coordinated action and innovative financing to unblock energy access and fuel Africa’s transformation.

While the challenge is immense, Africa’s experience in rapid electrification elsewhere, combined with global advancements in renewable energy technologies and growing private sector dynamism, indicate that the continent’s energy revolution is within reach, provided sustained political commitment, smart investments, and inclusive policies are prioritized.

Utilities and policymakers must learn from regions like South and Central Asia, which dramatically reduced electricity deficits within a decade by emphasizing decentralized solutions such as mini-grids and solar home systems. With over 50 million off-grid solar products sold across Africa in recent years, these models offer efficient, resilient pathways to power remote and underserved areas that traditional grid expansion may not reach quickly.

To avoid losing the race against time and climate change, Africa must seize existing knowledge, mobilize financing at scale, and champion technological innovation to electrify homes, businesses, and public services across its vast and diverse landscapes.

The future of millions of Africans depends on turning these challenges into opportunities, ultimately ensuring reliable, affordable, and clean electricity for all.

Investigative journalists emphasize the importance of collaboration with media houses to enhance their impact, shape public opinion, and address misconduct.

On Thursday, September 25, a workshop convened media professionals to discuss the current trends, challenges, and future of investigative journalism in Ethiopia. This event highlighted the urgent need for increased institutional support to facilitate this critical form of reporting.

Organized by the Editors’ Guild of Ethiopia, the Consortium for the Safety of Journalists, and the international organization IMS, the workshop aimed to develop strategies for strengthening investigative reporting by addressing significant obstacles and ensuring journalist safety.

Participants, including reporters and editors from both public and private media outlets, shared personal experiences regarding the challenges they face in their work. A recurring theme was the considerable cost—both financial and in terms of personal safety—that has deterred Ethiopian media houses from pursuing investigative journalism.

Discussions centered on practical strategies for overcoming these challenges. A key conclusion was the essential role of stakeholders, especially the government, in creating an environment where a free and independent press can flourish, allowing journalists to operate without fear of reprisal.

The workshop underscored a shared commitment to revitalize and strengthen investigative journalism, recognizing its vital role in promoting accountability and transparency in the country.

Despite Ethiopia’s impressive economic growth over recent years—with a robust GDP growth rate of 8.1% in 2024—new studies reveal that the country has fallen significantly behind its regional rival Kenya in attracting impact investment. This form of investment, which simultaneously generates social and environmental benefits alongside financial returns, is regarded as essential for bridging Ethiopia’s widening development finance gap and unlocking its full economic potential.

Nasreen M. Adem, founder and managing partner of ACE Advisors, said that Ethiopia captured less than 4% of the East African region’s impact funds, a stark contrast to Kenya’s bustling landscape of over 126 active impact investment funds. This discrepancy highlights a fundamental challenge for Ethiopia: while showing strong economic indicators, the country struggles with complex structural issues that undermine its attractiveness to investors seeking social impact.

Ethiopia’s challenges include persistent inflation nearing 30.8%, ongoing foreign exchange shortages, and rising external debt, estimated at $29 billion. Youth unemployment remains a pressing problem, with the nation ranked 184th on the Human Development Index. The country faces an estimated $397 billion funding gap for national development priorities through 2030—an amount compounded by the need for $252 billion to address climate change and $608 billion to achieve the Sustainable Development Goals.

Small and medium-sized enterprises (SMEs), the backbone of Ethiopia’s economy, face a financing shortfall estimated at $4.2 billion. Although nearly 800,000 SMEs operate in the country, only about 130,000 have access to formal credit, reflecting an enormous mismatch between supply and demand for capital. This gap restricts entrepreneurial growth, innovation, and job creation.

Impact investors typically focus on sectors aligned with sustainable practices such as agribusiness, energy, and fintech, while also aiming to generate social benefits including improved healthcare and education access, reduced inequality, and job stability. Despite these needs, Ethiopia’s impact investment market remains underdeveloped, with fewer than 15 private equity and venture capital firms actively engaged, dwarfing the rapidly growing ecosystem in Kenya.

Dagmawit Shiferaw, director of the Innovative Finance Lab at the United Nations Development Programme (UNDP), highlighted ongoing efforts to mature Ethiopia’s private capital markets by helping enterprises become “investment-ready.” The UNDP-organized Innovation Finance Laboratory works to bridge the gap between investor expectations and local business capacities.

Atieno Otonglo, market development manager at GSG Impact—a global non-profit supporting impact investment ecosystems—stressed that impact investing is a financially sound strategy rather than charity. She underscored the importance of a holistic ecosystem encompassing supply and demand, intermediary institutions, regulatory frameworks, and market facilitators like research organizations and legal advisors.

Atieno noted that Ethiopia’s financing challenges—including credit access gaps and stringent collateral demands—are not unique. She pointed to successful impact investment models from other African countries as blueprints for Ethiopia to emulate.

Efforts are underway to boost domestic investment sources, with plans to mobilize pension funds and establish a national impact investment partnership institution within the next one to two years. This entity aims to unite stakeholders from public and private sectors, foster innovation, attract capital, and pilot new financing approaches.

The inaugural Ethiopian Impact Dialogue, held in Addis Ababa on September 23, 2025 under the theme “Shaping the Future of Impact Investment,” marked a historic step toward building consensus among policymakers, investors, and business leaders. Supported by GSG Impact, ACE Advisors, UNDP, and the Government of Japan, the forum symbolized Ethiopia’s resolve to strengthen its impact investment ecosystem.

Analysts and practitioners emphasize that Ethiopia’s future depends not only on economic metrics but also on leveraging impact investing as a catalyst for self-sustained growth. By channeling investment into local enterprises, promoting innovation, and generating broad-based employment, Ethiopia can unlock inclusive development and narrow the gap with regional front-runners like Kenya.